A Gold IRA often comes with higher fees than a traditional IRA or Roth IRA, which invests exclusively in stocks, bonds, and mutual funds. Proponents of gold IRAs argue that these costs are worth the peace of mind of being protected from a potential financial apocalypse. But let’s assume that a disaster really does happen. How would you redeem your gold if it was in a depot across the country?
Gold IRAs are a special type of self-directed IRA that allows you to invest in physical gold and other precious metals, such as silver, platinum, and palladium. Investing in a Gold IRA requires the services of a custodian bank, a broker to buy gold, and an approved custodian to store gold. Like other self-directed IRAs, gold IRAs can be traditional or Roth. If this is the only IRA account, or if the other accounts don’t have enough liquidity, you’ll also need to let some of the gold sell so you can raise the money for the RMD.
Traditional IRA account, which is easy to set up and manage through a custodian bank, requires a few more moving parts to set up and manage a Gold IRA. You must store the gold in a Gold IRA in an IRS-approved custody account. You can’t keep it in a locker, a safe at home, or under your mattress. The best way to use a Gold IRA is to use it as an accumulation tool as part of a more comprehensive, more diversified investment strategy, which can also be achieved without a Gold IRA. The job of an IRA Gold company is to facilitate the creation of the IRA and the purchase of gold coins or gold bars.
This is less of a problem if a gold IRA was only part of its entire retirement portfolio as part of a diversification strategy in which gold provides inflation hedge. Popular Gold IRA companies include Orion Metal Exchange, Birch Gold Group, Red Rock Secured, Gold Alliance, Oxford Gold Group, and Goldco, among others. Patriot Gold Group has a long track record of helping investors secure their financial future through gold IRAs, and has received high marks from consumer groups. So if you want to hold gold in your IRA, you’ll need to set up a self-directed IRA first and then find a custodian that specializes in self-directed gold IRAs.
Those who prefer to invest in stocks of gold companies (such as Barrick Gold), in investment funds of such companies (such as Fidelity Select Gold Portfolio), or in ETFs that track the performance of a gold index (such as SPDR Gold Shares), can do so with a mainstream IRA.
